Items filtered by date: Tuesday, 17 October 2017

South African President Jacob Zuma sacked a vocal critic from his cabinet on Tuesday, a move expected to further deepen tensions as an elective conference to the ruling ANC draws near.

In his second reshuffle this year, Zuma dropped Higher Education minister Blade Nzimande, a member of the South African Communist Party, which is a key political ally of the ruling ANC. Zuma also moved State Security Minister David Mahlobo to the energy portfolio, the president’s office announced, reviving debate over controversial and costly plans for nuclear energy.

Nzimande has in recent months been incessantly vocal in calling for Zuma to go.

“The ANC is being stolen in broad daylight,” Nzimande told an anti-graft strike last month which urged Zuma to quit over a series of corruption scandals. The SACP and the country’s largest trade union, COSATU, are long-term political allies with Zuma’s African National Congress (ANC) party.

Both the SACP and COSATU have endorsed Cyril Ramaphosa as the ANC’s new president. Zuma is backing his ex-wife Nkosazana Dlamini-Zuma to succeed him. The ANC is due to elect Zuma’s successor as party leader in December, ahead of general elections in 2019.

 

AFP.

Published in Economy

Uber has announced the appointment of Lola Kassim as its new General Manager for West Africa.

Lola worked as a Management Consultant with McKinsey and Company where she led teams providing strategic business advice and implementing organizational and operational improvements in the energy, public, and financial services sectors in West and Southern Africa.

A seasoned professional with over 10 years of global experience working at senior private sector and government levels in Africa and Canada, Lola will be responsible for driving Uber’s overall strategy for West Africa, which includes improving reliability and service levels for uberX and creating additional value adds for driver-partners.

“I am immensely pleased to be joining Uber at a pivotal point in the company’s growth and expansion curve. My vision for West Africa, in particular, is to ensure that we are aligned with Uber’s overall objective of creating sustainable, alternative modes of mobility. In addition to creating value for driver-partners and riders, I will also be focused on ensuring that we continue to engage with our key stakeholders and relevant partners with a view to continued positive impact across West Africa.”

Speaking on Lola’s appointment, Alon Lits, General Manager Sub-Saharan Africa, Uber said: “As a company that is deeply committed to diversity and inclusiveness, we are excited to have Lola join the team of other incredible women at Uber – who are pushing the envelope towards achieving the global vision of creating value for riders and driver-partners alike. In West Africa, Lola will be supported by a highly skilled and enthusiastic team covering Operations, Marketing, Communications, Legal and Policy. As we often say at Uber, we are #superpumped.”

Prior to joining Uber, Lola spent 3.5 years as a Management Consultant at McKinsey and Company. She also worked as a Governance Advisor with the Liberian Presidency through the

Africa Governance Initiative, supporting a unit driving delivery of Presidential infrastructure priorities. She began her career with the Canadian government where she served as Policy Advisor to senior officials and managed units developing policy, strategy, and business cases regarding socio-economic development programming for Canada’s Aboriginal communities and foreign policy.

A Nigerian-Canadian, Lola holds a Bachelor’s degree from Harvard University and an MSc from the London School of Economics where she was a Chevening Scholar.

Published in Business

South Africa’s lacklustre growth has been driven by an underperforming education system, a swollen public sector, and a lack of strategic flexibility within South Africa’s private sector.

Addressing these issues will lead to stronger economic growth, increasing wealth equality, and a more stable social and political environment for South Africa.Dr Staffan

These goals cannot all be reached in the short-term, and require both the private and public sectors to contribute to them if they are to be achieved at all. If they are reached, they will be to the benefit of all South Africans, and in the meantime, the journey towards them will change a pessimistic national outlook and reignite the hope of a brighter South African future.

The first issue facing South African growth is the education system, which is struggling to deliver the quality of graduates that is required to build a multi-faceted economy. South Africa ranked 75th out of 76 countries in the 2015 OECD education league tables, 27% of students who have attended school for six years cannot read (compared to 4% in Tanzania), and only 37% of children starting school go on to pass the matriculation exam. As well as failing to deliver a literate workforce, the South African education system perpetuates a system of racial inequality, with black students ten times less likely than white students to do well enough to study a subject like engineering.

While there has been a modest improvement in the standard and equality of the education system since the end of apartheid, these statistics illustrate the challenges that remain. Economies are largely driven by the intellectual capital of their workforces, and this is increasingly true in a world that is becoming more automated and specialized. If South Africa cannot improve its education system, it will struggle to drive and maintain long-term growth.

The second issue, a bloated government, impacts all sectors and is endemic to developing nations. It is an affliction that is often the result of a government that tries to reduce unemployment and improve public opinion by hiring large numbers of people. When this happens, leadership stagnates, bureaucracy increases, and skills cannot be brought to bear where they are most needed. Public employment in South Africa has grown rapidly over the years, averaging more than 6 times the growth of employment in the economy as a whole from 2008 to 2014, and must be slimmed down to facilitate a flow of talented people into the private sector and drive economic growth.

In conjunction with re-evaluating the size of its public sector, South Africa must reduce the bureaucratic impediments to doing business. It is too difficult to set up new businesses, hire employees (especially international transfers), and grow once a business is established.This stifles entrepreneurialism and innovation, makes South Africa a less attractive target for international investment, and limits the private sector’s ability to grow. Simplifying the complex process of operating a business in South Africa is a necessary step to enabling the private sector to expand as it needs to.

The third issue facing South Africa lies within the private sector itself, which has not adapted to the new opportunities. Businesses must capture the new markets; pricing for consumers with less disposable income, offering differentiated services to the growing urban middle-class, and expanding into other African markets, which offer a significant opportunity.

With the South African economy recently coming out of a recession, consumers are struggling to maintain their standard of living at a time when they have less disposable income to maintain it with. By adjusting pricing and product and service attributes, companies can capitalize on these opportunities but many South African businesses have been slow to do so.

But first and foremost, South African companies need to get their mojo back. All too often I meet defeatism when the opportunities look bright. Cash flow is often strong and capabilities within companies are stronger than ever. Releasing this energy is what is needed.

South Africa has much in its favour. Its geographical positioning, inherent strengths, and international reputation mean that it can reassert its status as a leading emerging economy. There is no reason that it cannot match the growth of countries like Poland, Colombia, and Egypt, and should be targeting minimum GDP growth of 3% per year to 2025. Tackling problems systematically and aligning public and private growth efforts will drive the country towards this goal.

The keys will be improving education, reducing the size of the public sector, and increasing private sector flexibility to seize growth within the rapidly changing African landscape.


Dr Staffan Canback is an internationally recognised management consultant who has an interest in the issues and challenges facing emerging economies. A frequent visitor to South Africa, he is known for his rigorous, analytical approach to creating solutions and strategies.
Published in Opinion & Analysis

Every day there’s more news about the inevitable arrival of autonomous vehicles. At the same time, more people are using ride-hailing and ride-sharing apps, and the percentage of teens getting their driver’s license continues to decline.

Given these technologies and social changes, it’s worth asking: Should Americans stop owning cars?

We’ve conducted an analysis of the all-in cost of car ownership, and we found that mobility services such as ride-hailing and ride-sharing apps – which few people today would consider their main mode of transportation – will likely provide a compelling economic option for a significant portion of Americans. In fact, if the full cost of ownership is accounted for, we found that potentially one-quarter of the entire U.S. driving population might be better off using ride services versus owning a car.

From dream to brutal reality

America’s love affair with the car and individual car ownership took off after World War II, aided by inexpensive fuel, a rising consumer class and a vast national network of highways. A new generation of young professionals moved away from the urban core to the suburbs and abandoned mass transit for transportation enabled by personal car ownership.

University of Texas at Austin

This shift transformed the modern American landscape, triggered a new approach to city planning and enabled urban sprawl. Cities that blossomed before WWII – New York and Boston, for example – already had and continue to use their mass transit systems. By contrast, cities whose growth mostly occurred in a post-war boom like Los Angeles, Atlanta, Houston and Denver were built and effectively designed around car ownership. It’s still typical for an American family to buy a house that has a large garage to store cars.

But for many people, the 1950s concept of driving as an expression of personal liberty has been replaced by the brutal reality that driving is often a tedious chore. With an average price of US$35,000 apiece in the U.S., cars are used about 4 percent of the time, during which drivers are often subjected to congested traffic.

On its face, spending so much money for an appliance that starts losing value immediately, takes up vast amount of our free time and is rarely used seems ridiculous. Is it time to consider a whole new approach to personal transportation?

Weighing costs

To answer this question, we built a comprehensive calculator that includes the costs of car ownership and compares it with an alternative of using mobility services, such as ride-hailing and ride-sharing apps, full-time to replace personal car ownership. The results might surprise you.

The costs of traditional car ownership go far beyond the price tag: There is also interest paid on car loans, insurance, taxes, fuel and maintenance. Some expenses are non-obvious, such as parking, property taxes and construction costs for home garages, and the value of our time.

Ride-hailing services become more economic when a person’s car is more expensive and the more that person values his or her time (the blue end of the charts). The cost of transportation services now is usually between $1 per mile (on left) and $1.50 per mile (right), but the introduction of autonomous vehicles has the potential to push prices to below $1 per hour. The intersecting lines represent the results for the median price for a new car and median wages reported to the Social Security Administration. The acronym TNC stands for Transportation Network Company. F. Todd Davidson and Gordon Tsai, CC BY-ND

The value of an individual’s time – that is, the dollars per hour you would assign to the time you spend driving – is one of the most important factors in our calculations.

The average American spends 335 hours annually behind the wheel driving over 13,000 miles. Add in the hours we spend maintaining, cleaning and managing our cars, and it becomes clear that America’s focus on personal car ownership is costing us a significant amount of time, arguably our most precious asset.

How much would you pay to avoid the stress of driving around town? How much would you pay to use that time more efficiently, such as catching up on email, reading a book or taking a nap? What if you could do work-related tasks while riding? Some professions are more suited to using time riding in a productive way: It’s probably easier for a lawyer to clock billable hours while riding to work than a plumber, for example.

When these costs are included, mobility services might be the economically preferable option. To be clear, this analysis is focused on full replacement of personal car ownership in which an individual would shift to using ride services for all trips, rather than purchase a new vehicle.

The decision for owning a vehicle or using mobility services is unique to every individual. If you purchase a highly efficient vehicle for less than $25,000 and drive it more than 15,000 miles per year until it falls apart, then you should definitely own a car if your goal is to save money.

But, if you drive less than 10,000 miles per year, face long waits in traffic, or place a high value on your time that would otherwise be spent driving, our calculations show that mobility services might be the cheaper option. Geography can also play a role – it’s not a coincidence that there have historically been so many taxi cabs in New York City, where the high cost of parking and slow pace of traffic consume time and money.

Outpricing human drivers

The rise of autonomous vehicles used for carpooling and ride-sharing services could make mobility services even more compelling, particularly when you consider the economics from the service provider’s perspective.

An autonomous Uber car being tested in Pittsburgh. AP Photo/Jared Wickerham

Assume for a moment that you operate a fleet of vehicles that provide mobility services. Let’s also assume you can purchase the vehicles in bulk for $20,000 apiece and that they will operate full-time for five years (the average age of a New York City taxi was 3.6 years in 2015). The median annual pay for a taxi driver is approximately $25,000. This means that it will cost you $145,000 to purchase the car and pay a driver over five years of operations (ignoring fuel, maintenance, registration and other miscellaneous operating expenses).

Using common accounting practices, we calculated that if you could buy an autonomous vehicle for less than $114,000, a service provider would be better off never hiring a driver.

For the average customer, a price tag of $114,000 is unimaginably high for a car. But, for a company like Uber that might someday operate a fleet of autonomous vehicles, a price tag north of $100,000 might look like gold when compared with paying drivers, a major contributor to operating cost.

As the price for autonomous vehicles goes down, the cost of delivering ride services goes lower. That means more consumers are more likely to use them, expanding the overall market.

Uber, Alphabet and many of the automotive companies understand this. It’s one of many reasons why there is an epic race to capture market share and eventually be the first to deliver fully autonomous vehicles.

On the other hand, if the price of autonomous vehicles falls far enough, maybe individuals will buy their own and recapture the time they currently spend driving themselves, obviating some of the value of mobility services.

Cultural factors

But, another question remains: Do Americans really want to give up their cars? Even if mobility services with carpooling and automation are a less expensive choice, the service might still not be adopted quickly since people purchase cars for many reasons beyond simply price (for example, they buy cars for convenience, status, fun, identity and so forth).

For many decades, the car has been a critical part of the American culture, often used as a tool to flaunt wealth and showcase the unique personalities of the drivers. Will Americans want to ride in cookie-cutter cars that are part of a larger automated fleet? Will they trade off the idea of car ownership as an extension of identity to gain back some of their free time?

The post-war American dream: a home in the suburbs with a car to get you around. Richard, CC BY

Some trends do appear to be working in favor of increased use of mobility services. As the United States, and the world more broadly, continues to adopt ever greater levels of digital communication, more people will be able to complete work while on the go. And, the movement toward cities during the past decades has resulted in denser urban centers, increasing traffic congestion and making the case for alternatives to traditional car ownership.

Even changes in how different generations consume goods and services might be playing a role. Millennials have shown tepid interest in following in the footsteps of prior generations when it comes to car ownership. It will be interesting to observe whether Generation Y shows more desire for cars as they begin to enter parenthood and push toward suburbs in pursuit of affordable housing.

How the transition will play out is still unclear. If we were to postulate, it seems the most likely outcome is that the future transportation system will be a mix of personal car ownership and mobility services, using both systems as complementary. If more people use carpooling services in particular, these complementary systems of personal car ownership, mobility services and public transportation might make our roads and cities cleaner, faster and more affordable.

In addition to common mobility services today, Uber and Lyft might soon be joined in force by microtransit operators, like Ford’s Chariot shuttle service.

As mobility services become more mature, we will likely see new solutions emerge to make it even more convenient to meet specific needs, such as transporting youths, the elderly or disabled people, and even assist in disaster recovery efforts. The increased level of service could create a virtuous cycle that reinforces the value of mobility services, producing greater adoption, which further lowers costs and leads to even greater adoption. When it’s all said and done, the ease and economic benefits mean that the transition to mobility services might take place faster than we think.

 

Researcher Zhenhong Lin, Ph.D., from the Oak Ridge National Laboratory contributed to the research in this article. Gordon Tsai of the University of Texas also contributed.

F. Todd Davidson, Research Associate, Energy Institute, University of Texas at Austin and Michael E. Webber, Professor of Mechanical Engineering and Deputy Director of the Energy Institute, University of Texas at Austin

This article was originally published on The Conversation. Read the original article.

Published in Opinion & Analysis

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